Krispy Kreme

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Krispy Kreme Strategic Analysis: Introduction In 2003 Krispy Kreme was named by Fortune Magazine as “America’s Hottest Brand” and in 2004 they reported net income of $50 million. However over-expansion, an expensive store network, revelations of falsified financial reports and changing trends in diet have meant that Krispy Kreme revenues have declined by 50% between 2005 and 2010 The strategic problem considered is to analyse Krispy Kreme’s current operations and suggest recommendations for how this may be tailored for the UK market for long-term profitability given cultural and retail differences. Current strategy Krispy Kreme operates 582 stores (including franchised) in 18 countries worldwide. Stores range from 4,000 to 8,000…show more content…
Krispy Kreme train their staff who usually have little experience or education; consequently, they pay employees minimum wage or similar and are therefore affected by minimum wage increases. Other political factors are government actions to reduce obesity; however it is very unlikely that government will legislate against high fat and unhealthy foods Economic The continued economic downturn has meant tightened consumer spending, as Krispy Kreme is a non-essential food item this may pressure sales. Inflation is above the Bank of England target and there is upward pressure on long-term interest rates as shown by the UK treasury yield curve. An increase in interest rates will increase the cost of capital and mean more expensive borrowing at a time that they could need to expand to compete with rivals. Social UK consumers are becoming more aware about the ingredients in food, e.g. boycotting trans-fats, battery farmed poultry and mass farmed tuna. In 2008 this motivated

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